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Mr. Takafumi Horie, once the high-flying president of the Internet service firm Livedoor Co., who was known for his T-shirt-and-slacks attire, appeared in public this week in a suit and tie. This time he was in Tokyo District Court charged with violating the securities law. Reflecting not only public curiosity in the case but also social repercussions his arrest and indictment have caused, more than 2,000 people waited outside the court for the 61 gallery seats. Among them were former Livedoor shareholders who had lost money.

Mr. Horie is alleged to have ordered four executives to fabricate a 5 billion yen consolidated pretax profit for the business year through September 2004, hiding an actual loss of 300 million yen, by such means as illegally listing 3.7 billion yen in proceeds from sales of the Livedoor stock as profit. He is also charged with spreading false information that a subsidiary would take over another company while the latter had already been bought by an investment fund under Livedoor’s control. In a related charge, he is accused of padding the subsidiary’s sales and making it appear in the black in a November 2004 report.

While the four executives, including Mr. Ryoji Miyauchi, former chief financial officer at Livedoor and once Mr. Horie’s most trusted ally, have acknowledged most of the prosecution’ accusations, Mr. Horie denied all charges in the first hearing.

“I have never done such illegal acts, nor have I ordered any of these things,” Mr Horie said. “The indictment was filled with malice from the first. I had never expected I would be indicted in such a manner.”

To some people, Mr. Horie was a hero who had challenged the established order. It is hoped that the trial will unravel what this maverick businessman actually did and did not do, and the mechanism of methods used in the alleged crimes, such as an investment fund and stock swaps.

Under a new trial method introduced in November 2005, the prosecution and the defense counsel have already agreed on which points to focus in the proceedings. The Horie case will thus proceed speedily and the public will be able to know the court’s conclusion around February.

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